The U.S. has officially started the process of exiting the Paris climate agreement, citing an unfair economic burden posed on American workers and businesses, the State Department said Monday.

Leaving this agreement is a good idea, but for other reasons than that one.

As I confessed before, I am rather agnostic on climate change or, as it was previously called, global warming. If disastrous climate change is happening with some reasonable probability, protection against it might be considered a public good—such as, for example, protection against asteroids. Yet, individual liberty should not be sacrificed to such an enterprise. This approach is not very different from Tyler Cowen’s in his book Stubborn Attachments (which I reviewed in Regulation).

One good reason why the Paris Agreement deserves being denounced lies in its rhetoric. The text is a good example of the politically correct nonsense that the reigning establishment has been imposing on us for too long. A few quotes from the preamble of the Agreement illustrate this:

Acknowledging … [the Parties’] respective obligations on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity …

Noting the importance of ensuring the integrity of all ecosystems, including oceans, and the protection of biodiversity, recognized by some cultures as Mother Earth, and noting the importance for some of the concept of “climate justice”, when taking action to address climate change …

Similar balderdash pops up elsewhere in the Agreement text:

Parties recognize the importance of integrated, holistic and balanced non-market approaches being available to Parties to assist in the implementation of their nationally determined contributions … A framework for non-market approaches to sustainable development is hereby defined to promote the non-market approaches referred to in paragraph 8 of this Article. …

Parties acknowledge that adaptation action should follow a country-driven, gender-responsive, participatory and fully transparent approach, taking into consideration vulnerable groups, communities and ecosystems, and should be based on and guided by the best available science and, as appropriate, traditional knowledge, knowledge of indigenous peoples and local knowledge systems, with a view to integrating adaptation into relevant socioeconomic and environmental policies and actions, where appropriate.

The rights of everybody to everything except to individual liberty, repeated and unscientific incantations such as “climate justice” as a code word for social justice, the invocation of “Mother Earth” and holism simultaneously with “the best available science”—some may discount all that nonsense as mere words. But it is with this sort of linguistic jostle that ideals antithetical to individual liberty have been, and are being, stealthily imposed on us by politicians, bureaucrats, and their favorite supporters.

If the hypothesis of climate change has any validity and if its protection represents a public good in the economic sense, the production of which would involve trade-offs, it should be possible to explain the matter in a rational way with precise concepts. It should be possible to define the conditions for general consent in a free society. The Paris Agreement does not reflect this approach.

An interesting question is how, more generally, from “social justice” to “climate justice,” to “sustainable” this or “inclusive” that, or for that matter to “fair trade” (another meaningless slogan), the collectivist establishment is able to control language and rhetoric so efficiently. Government subsidization of education, especially higher education, is likely one of the factors. The effects have been identified by Friedrich Hayek. In The Fatal Conceit, he wrote:

So long as we speak in language based in erroneous theory, we generate and perpetuate error.

READER COMMENTS

Phil H

Nov 12 2019 at 1:29am

This is… just politics. The fact that you don’t like some of the language doesn’t mean that it is “meaningless” or not “rational” or “precise”. For example, while climate justice may not be a concept that you agree with, it has some fairly clear content, e.g. from Wikipedia, “those who are least responsible for climate change suffer its gravest consequences”. The section on “traditional knowledge” is a nod to the failures of paternalistic colonialism – those times when scientifically informed people from Britain completely messed up local ecologies by trying to impose their scientistic view of agriculture/forestry/hydrology/etc. In France, Britain, and the U.S.A., these may not be major concerns, but for places like Brazil and Indonesia they could be extremely important.
So if you disagree, then disagree, but dismissing these concepts as “irrational” is just a rather grim form of negative politicking.

Nov 12 2019 at 9:04am

The fact that you don’t like some of the language doesn’t mean that it is “meaningless” or not “rational” or “precise”.

Correct. The fact that the concepts are meaningless, irrational, and imprecise are why they are that way.

“Climate justice” may align to what Wikipedia says, but note that it doesn’t give us any hard and fast actionable items. What does it mean by “least responsible for climate change?” What does it mean “suffer the gravest consequences?” How should/could that be fixed? What is in line with “climate justice?”

One such way to make the poorest more resilient to climate change is to make them wealthier: help them modernize with factories, air conditioning, electricity, etc etc. But all these things would naturally increase their fossil fuel consumption. $100 says there will be folks who object saying that is not “climate justice” even though it directly solves the supposedly clear Wikipedia concept.

Chris Coyne has an excellent book out called Doing Bad by Doing Good where he highlights the vacuousness of a lot of these political catchphrases and how it ends up doing more harm than good (if any good is done at all). Chris’ discussion is in the realm of developmental economics, but the lessons are easily transferrable.

Nov 12 2019 at 11:38am

Another thing to keep in mind, to Pierre’s point, even if something on paper appears precise, transforming it into reality can demonstrate how imprecise it really is.

For example, welfare economics appears very precise and accurate on paper: simply measure the area of the triangle between the demand curve and the market price and you have consumer surplus. Do the same with the supply curve and you have producer surplus. Add the two together and you have total surplus. We can simply monkey about with taxes or institutions to get “better’ results. Very precise. Very accurate. But that is only on a blackboard.

As soon as one tries to bring that into the real world, all sorts of issues pop up that require judgment. Whose surplus matters? Just the buyers and sellers? What about the observers’ judgment of the transaction? What about externalities? What about the observers to the observers’ judgment of the transaction? What about personal feelings and psychic costs? What about costs to foreigners? Etc etc etc.

And all this assumes the market is in equilibrium, such that monetary outlays are a reasonable proxy for actual costs faced by consumers and producers. If the market is in disequilibrium, all bets are off!

And all this is assuming now public choice or knowledge issues!

Suddenly, what appeared to be very precise on paper is extremely vague in practice. Lots of judgments must come into play, all of which will affect the analysis.

For more on this point, I recommend I.M.D. Little’s book “A Critique of Welfare Economics.”

Thaomas

Nov 12 2019 at 4:23pm

Yep, all very messy. How do you know just assuming the answer is better? And not just better than the revenue neutral tax on CO2 emissions, but better than what we’re likely to get instead of a revenue neutral tax on CO2 emissions?

Nov 13 2019 at 7:38am

I don’t understand what you are asking

Thaomas

Nov 13 2019 at 8:01am

I took it that you were criticizing using welfare economics to evaluate policy, specifically the policy of preventing the harm done by increasing CO2 in the atmosphere with a tax on net emissions of CO2. with the implication that because of the methodological problems identified, the best rate for the CO2 net emissions tax was zero. I wondered how you could be so sure.

Nov 13 2019 at 8:18am

No. The point is that economic theory indicates the presumption should be that the default rate is zero and those making their case for a carbon tax must show extremely convincingly that their proposed solution overcomes all the issues and does not make the situation worse.

Good policy is more than just “adding up the little triangles.” Determining those triangles ranges from near-impossible to actually impossible depending on your school of thought.

Thaomas

Nov 13 2019 at 2:02pm

I think economic theory indicates which variables one should look at in order determine the optimal rate. The theory (model) that gives zero as the optimal uniform tariff rate will, I believe, yield a non-zero rate for the optimal revenue neutral tax on CO2 emissions if emitters do not face an economic incentive to take account of the harm that CO2 accumulation in the atmosphere causes.

Nov 13 2019 at 2:21pm

I think economic theory indicates which variables one should look at in order determine the optimal rate.

Economic theory does no such thing. That’s mathematics, not economics. Economics warns against that very hubris. See Buchanan’s “What Should Economists Do?” and Hayek’s “The Use of Knowledge in Society” for starters.

Thaomas

Nov 13 2019 at 6:31pm

I believe you are conflating what you take to be the opinions of Mr. Buchanan and Mr. Hayek with “economic theory.”

Is there any change in the state of the world that would alter your opinion about whether a revenue neutral tax on CO2 emissions (or a increase/reduction in the minimum wage or a more or less progressive income tax or consumption tax or an increase/decrease in restriction on immigration, or freer/less free trade) would be a good idea.

Nov 14 2019 at 11:27am

I believe you are conflating what you take to be the opinions of Mr. Buchanan and Mr. Hayek with “economic theory.”

That, plus the actual operalization of the models you cite. My argument is not simply “Buchanan/Hayek/Coase/Smith (Adam)/Smith (Vernon)/Ostrom, etc said so.” My point is the models themselves have lots of real-world issues in them, that merely assuming one has the knowledge and that the world is just a big ol’ maximization problem does not comport with reality according to the models. I cite Hayek et al as authoritarian critiques of the models, as people who better explain the points I am making better than I. They are folks who have done real research, advanced the theory in real ways. They are not to be glibly dismissed as “opinion” any more than Newton’s work on gravity is “conflating the opinions of Newton with physics.”

Is there any change in the state of the world that would alter your opinion about whether a revenue neutral tax on CO2 emissions…would be a good idea.[sic]

Yes. The other day, I listed 13 objections (which, admittedly, is just part of my list). Those objections must be overcome before I can consider any sort of central plan a good idea. It’s a presumption. Just like in court there is a presumption of innocence that can be overcome, but merely “well, he could have done it” is not sufficient. That’s all you’re giving me: “a carbon tax could work.”

Adadm Ruth

Nov 13 2019 at 11:59am

To quote the venerable Yogi Bera:

“In theory there’s no difference between theory and practice. In practice there is.”

Thaomas

Nov 12 2019 at 7:40am

It seems to me that many climate change skeptics conflate being skeptical about the magnitude of the harm with skepticism, about the cost-benefit analysis of many of the things, that have been proposed (and executed!) in order supposedly to reduce net CO@ emissions. It is a fools game to find wildly exaggerated estimates of harm from CO2 accumulation and clearly counterproductive “solutions.”

On a separate point, reducing and eventually reversing the accumulation of CO2 in the atmosphere is not a public good (a collective action problem); it is a response to an externality.

Pierre Lemieux

Nov 12 2019 at 10:30am

Good points, Thaomas, but there are a couple of problems. If climate change is just a matter of current externality and not of public good production (if only some people are to be likely affected), lower-cost solutions are especially important, such as perhaps people adversely affected just moving. Second, positive externalities must also be considered–the benefits from a warmer climate in cold regions. And for countries who have not had an industrial revolution or have had it only recently, aren’t the indirect benefits they get from it a positive externality? Who should pay compensation to whom? The UN/establishment approach does not allow such questions.

Nov 12 2019 at 11:15am

Second, positive externalities must also be considered–the benefits from a warmer climate in cold regions.

This is an important point and one of the major issues with trying to set a carbon tax (or any other kind of “optimal” tax): externality is in the eye of the beholder.

Tom DeMeo

Nov 12 2019 at 2:07pm

Question: why do you bother with economics at all? You seem to constantly use the same “it’s impossible to really know” argument.

I’m sure it’s true that the Paris Accord is filled with junk rhetoric, but energy is not a free market concoction. Whether we stick with fossil fuels or move forward to the next technological level of options, public accommodation is extensively needed to make it all work. Energy requires long term public planning and consent on a massive scale.

It is unfortunate that the climate debate takes up all the oxygen in debates on energy. Pollution and ecological destruction separate from climate change is probably incentive enough. Add in the huge distortive impact on geo-politics and the corruption that extraction wealth causes, and it’s pretty obvious we can do better. Fossil fuels cause wars!

We can all point cynically at government’s shortcomings as a vehicle for planning and decision making, but we have no choice but to decide on energy policies. The current system needs all kinds of government help to keep the oil and gas flowing. Whatever we end up using in 20 years will require us to step up, decide things and plan for it. We might as well pick the best viable long term option as we see it, without perfect information.

Nov 12 2019 at 2:17pm

Question: why do you bother with economics at all? You seem to constantly use the same “it’s impossible to really know” argument.

To discuss and be aware of the limitations of modeling and the difficulties of turning something from theory into reality is not the same as saying “it’s impossible to really know.”

Economics, like any of the sciences, gives us a lens through which to study the world. The Economic Way of Thinking is not an existentialist crisis, but a framework of thought:

What are the incentives people face?
What are the trade-offs involved?
What are the limitations we face (ie, scarcity of information and knowledge)?

To be aware that a hammer is a terrible tool to turn a screw does not imply we know nothing about construction, but rather just the opposite.

Thaomas

Nov 13 2019 at 7:26pm

@ Jon,

What are the incentives faced by the firm that decides to convert C + O2 to CO2? Does it correctly trade off the benefit that it’s consumer gain from the conversion against the harm the increased CO2 in the atmosphere causes? Does the firm take account of all the knowledge in society? Does it appropriately weigh the scarcity of ability of the ecosphere to absorb CO2?

Nov 14 2019 at 11:19am

What are the incentives faced by the firm that decides to convert C + O2 to CO2?

Are there any firms doing that? Carbon emissions are a byproduct of their larger production process, so the incentives they face are on the production side of things, but I don’t know of any firm(s) out there explicitly deciding to combine carbon and oxygen to make carbon dioxide (except for those who make the gas for carbonization of drinks and the like). The answer to your question lies in the concept of “opportunity cost.”

Does it correctly trade off the benefit that it’s [sic] consumer gain from the conversion against the harm the increased CO2 in the atmosphere causes?

Precisely define “correctly” here (which is part of my larger point: a precise definition does not exist; it is entirely in the eye of the beholder).

Does the firm take account of all the knowledge in society?

No, but nobody does/can. That’s part of Hayek’s whole point in Use of Knowledge in Society. Knowledge is dispersed and often articulate.

Does it appropriately weigh the scarcity of ability of the ecosphere to absorb CO2?

Nov 14 2019 at 1:18pm

We can, and my point is as well should, convert your questions to the carbon tax:

What are the incentives faced by the government that decides to tax CO2? Does it correctly trade off the benefit from consumer gain from the conversion against the harm the increased CO2 in the atmosphere causes? Does the government take account of all the knowledge in society? Does it appropriately weigh the scarcity of ability of the ecosphere to absorb CO2?

If your first set of questions is economic theory, the second set I just created is as well. Yet, you treat the first as economic theory and the second as “opinion.”

Pierre Lemieux

Nov 16 2019 at 11:26pm

@Tom DeMeo: Many we’s. Who are they?

Thaomas

Nov 12 2019 at 11:59am

Slightly off topic (and not directed at you, but why does the site repost articles that do not allow comments?) How could Caplan, however many years ago the post on externalities was written, dismiss climate change, THE externality issue of the century (of human history so far?) with the possibility that some economists think that people in cold climates may benefit more from CO2 accumulation than people in warm climates will suffer or discuss why there is no Coasean bargaining among these parties to achieve the minimum harm/maximum benefit from CO2 accumulation.

Nov 12 2019 at 12:17pm

As a group of climate scientists testified before Congress this summer, the planet has been warming for 20,000 years since the Ice Age. Glaciers once covered most of North America, Europe and Asia. Most of the warming took place before 1900. The medieval warming period was at least as warm as today. Vikings named Greenland because it offered such good farming. Under the ice you’ll find Viking farms. The little ice age bottomed around 1800 with massive famine and starvation world-wide and the planet has been warming since it, too. Humans contribute just 5% of atmospheric CO2. There is little reason to believe humans have caused global warming or “climate change.” Most likely it’s caused by cycles in the energy output of the sun.

Thomas Hutcheson

Nov 12 2019 at 1:02pm

Your model of climate change has a much lower partial derivative of warming wrt CO2 accumulation and implies that much lower net emission and higher tax on net emissions will be required for cost minimization.

Provisionally, let go with the ICCC. If the science shows that even lower net emissions are required that’s feasible

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